Every Trick in the Book

It should be clear to all who are following the markets on an intraday basis that the current mode of operation is to violently whip things around enough for the algo-bots to sop up some of your previous profits, or prevent some from accruing now. This is not sour grapes on my part. This is the way markets are from time-to-time. We are still in the Minor B wave.

ES Futures - 4 Hr - Minor B

Yesterday's 'five waves down' on the cash market ended only the c wave of a (b) wave flat before heading higher. Notice the sheer number of diagonals we have been dealing with in this pattern - some upward - like (c) of ((w)), or all of (a) of ((y)), and some downward like to start the three-wave a wave of (b) of ((y)). There are truncations .. like the (c) wave of ((w)) and the (b) wave of ((y)), too.

This is frustrating summer-light trade. I've seen some of it before, but I would say not to this extent - perhaps it speaks to the degree of the wave that we are in.

Notice two things from this chart. First, notice how the wave is struggling at the level of the ((y)) = ((w)) equality point. Second, notice the angle of the ((y)) wave. It is at a much shallower upward angle that the ((w)) wave is. The should mean the eventual pull of the market will be downward. 

In keeping with the theme of whipping thing around, perhaps the cash index is making this short term triangle.

S&P500 Cash Index - 15 Minutes - Triangle

We have not seen a final triangle yet. If this one should develop properly, then, perhaps it will precede the last wave to the high of minute ((y)) of Minor B.

After the close, the data came through on the put-to-call ratio. This is the second lowest level I've every recorded, and the lowest level for the 10-day average I've ever recorded.

Put-Call Ratio - Daily - Lowest 10-Day Average

With the caveat that "past performance is no guarantee of future results", look back at what happened in January when the speculation got this intense. I think ignoring the speculation - at some point - becomes fool-hardy.

Have a good start to your evening.

TraderJoe